At the conclusion of last week’s trading on the Nigerian Exchange Limited (NGX) equities sector, the insurance index led the gainers’ chart with 4.1 percent, helped by purchasing activity in Sovereign Trust Insurance (+27.3 percent) and Sunu Insurance (+17.7 percent).
The banking index added 1.9% last week, trailing the industry. The increases were caused by price increases in Zenith (+3.9%) and GTCO (+5.4%).
However, due to selling pressure on International Breweries (-5.6%), Champion Breweries (-4.2%), MTN Nigeria (-0.6%), and CWG (-4.2%), the Consumer Goods and AFR-ICT indexes fell by 0.5% and 0.3% w/w, respectively.
As a result, the market closed positively, with the market capitalization and all-share index rising by 0.2% to end the week at N39.173 trillion and 71,230.48, respectively.
The month-to-date (MTD) and year-to-date (YTD) returns thus ended up at +2.9 percent and +39.0 percent, respectively. On the trading floor, investors transacted 2.4 billion shares worth N22.7 billion in 33,230 trades overall. This is in contrast to the previous week when 32,763 deals saw the exchange of 2.025 billion units, valued at N27.7 billion.
With 1.72 billion shares worth N11.6 billion exchanged in 14,585 deals, the financial services sector dominated the activity chart when measured by volume. This sector accounted for 71% of the overall stock turnover volume.
With 185.7 million units valued at N424.7 million in 2,816 trades, the services sector came in second. The ICT sector came in third place with 2,971 deals totaling 139.9 million shares valued at N4.4 billion.
33.4 percent of the overall equity turnover was made up of trading in the top three equities, which are Unity Bank Plc, Veritas Kapital Assurance Plc, and Universal Insurance Plc (measured by volume), which accounted for 809.400 million shares worth N492.6 million in 2,005 deals.
Analysts forecast a dismal future, pointing to negative macroeconomic data as major obstacles to company profits. Ambrose Omordion, the CEO of Investdata Consulting Limited, stated specifically that manufacturing companies, in particular, may find it difficult to pay dividends in line with their present market price due to a number of obstacles they have faced thus far.
“Traders should exercise caution as the market consolidates during this distribution phase, given the elevated level of volatility." The easiest method to protect yourself from the system’s increasing inflationary pressure right now is still to invest in stocks.”
Consequently, as investors analyze the results of the most recent TB auction to gain more understanding of the movement of money in the financial market, this retreat or correction will present another opportunity for astute market participants to enter the fray.
“We anticipate cautious trading in the local stock market in the coming week due to the absence of significant positive catalysts to boost sentiments," Cordros Capital analysts stated.
“All things considered, we stress the importance of investing exclusively in fundamentally sound stocks because the weak macro environment continues to be a major drag on corporate earnings.”
“We anticipate cautious trading in the local bourse in the upcoming week given the absence of significant positive catalysts to bolster sentiment," Afrinvest stated.
The Central Bank of Nigeria (CBN) and the Federal Government have been requested by the exchange to provide listed companies preference when it comes to foreign exchange (FX) and procurement procedures.
Temi Popoola, the chief executive officer of NGX, asserts that the strategic approach is essential to drawing in more businesses to list on the exchange and reducing the pervasive FX difficulties in the economy.
Popoola stated at the MTN Capital Markets Day that NGX is thrilled about the recent administration shift and its updated hope agenda because it offers a chance to collaborate with market participants, including the regulators, to address the issues that the government and listed firms are facing.
Popoola said that the exchange was collaborating with the government to use the capital market to address the many issues affecting the economy. He also mentioned that FX illiquidity might be resolved by allowing dollar-denominated transactions to be executed on NGX.
“There are businesses that would like to list on our exchange, but their revenue and earnings are all in dollars,” he stated. Additionally, several publicly traded corporations prefer to receive their dividend payments in US dollars. That is not permitted under the existing regulation, though.”
We are collaborating with lawmakers and authorities to attempt to resolve that since it would be really beneficial to the government, which is searching for FX answers to their problems. We think this will also enable people to use the money they have saved in domiciliary accounts to support the economy and capital market.
